Lendlease Secures $360M Loan for Brooklyn Waterfront Towers
A two-building, 834-unit apartment complex will rise in Greenpoint.
Australian developer Lendlease has landed a $360M construction loan for a 36-story, 834-unit apartment complex on the waterfront in the Greenpoint neighborhood in Brooklyn.
The financial package for the two-building development at 1 Java Street is being provided by a consortium of lenders led by Bank of America and including Mizuho Bank, OCBC Bank and TD Bank.
The foundation for the project was installed in June in order to qualify for a 421a tax break for affordable housing projects. NY’s state legislature let the incentive expire on June 30 but said projects that broke ground before the end of June would still qualify.
The developers have designated 30% of the units at the 1 Java Street multifamily as affordable.
The twin-tower development will include a new 18K SF public waterfront park connected to India Street Pier, including a dock for the East River Ferry. Each building will have about 13K SF of ground-floor retail space.
Lendlease is partnering with Australian pension fund manager Aware Super. The joint venture bought the 2.9-acre site for $111M in 2020 from RedSky Capital and JZ Capital.
According to the partners, the residential development in Greenpoint will meet energy-efficiency standards set by NYC’ new Local Law 97.
“This financing is proof that experienced, creditworthy sponsors can secure debt financing even in uncertain markets conditions,” said Ben Byrne, Lendlease portfolio manager, in a statement.
The expiration of the 421 tax break in June produced a record surge of building permit applications for a total of more than 58K units, in H1 2022, close to the level the last time the tax exemption was allowed to expire, in 2015.
In July, multifamily developers with projects in NYC facing construction delays—projects that were eligible for 421 property tax exemptions—said they were left holding the bag by the NY State Legislature.
The 421 tax provision, first enacted 51 years ago, offered a property tax exemption for housing projects in NYC that include a percentage of units designated for lower-income residents. According to a study by NYU’s Furman Center, nearly 70% of rental housing built in the past decade in NYC used the tax abatement.